The state’s Economic Development Authority has launched its New Jersey Entrepreneur Support Program, the latest in its COVID-19-related efforts.
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The $5 million program, part of the EDA’s package of incentives to help the state’s businesses deal with the economic fallout of the coronavirus outbreak, aims to give entrepreneurs with limited funding access to capital from investors that are already investing in their companies.
The program guarantees repayment of an investor loan advanced for working capital purposes, encouraging investors to support portfolio companies, the EDA said in a news release.
“The financial support of angel investors, venture capital firms and other similar investment entities is the lifeblood that drives the innovation economy and entrepreneurship in the Garden State,” CEO Tim Sullivan said in a prepared statement. “In these challenging times, we remain committed to ensuring that investment dollars continue flowing to emerging technology and life sciences companies in the Garden State as we work toward fulfilling Gov. (Phil) Murphy’s vision of creating the most diverse and inclusive innovation ecosystem in the nation.”
The EDA will guarantee 80% of an eligible new loan or convertible note made by a qualified investor into a New Jersey qualified business, with a cap of $200,000 guaranteed per company. Investors are qualified if they have already provided certain funding to the company; companies are eligible if they are headquartered in New Jersey, have fewer than 25 employees (at least 50% in New Jersey) and less than $5 million in revenue — among other requirements.
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